Supplemental Executive Retirement Plans

In addition to designing employee group retirement plans for our clients, O’Neill Group Global specializes in the area of executive pension planning.  With our comprehensive pension consulting services, we address the special needs of the executive team, bridging the gap between retirement benefits provided under statutory plans and their retirement income requirements. 

A Supplemental Executive Retirement Plan (SERP) can be a particularly valuable incentive, enabling employers to attract top industry talent to their organization.  A SERP acts as a long-term financial reward, providing an excellent retention device for those individuals that have been instrumental in the growth and success of the company. 

A SERP can be established on a Defined Benefit or Defined Contribution basis, and be either funded or unfunded.  Three common SERP structures include:

  1. Non-Registered Savings Plan
  2. Non-Insured Retirement Compensation Arrangement
  3. Insured Retirement Compensation Arrangement

In designing an executive pension program, we take into account the particular objectives of each company by including the following elements:

Vesting Schedule   A SERP can act as an excellent executive retention device, or “golden handcuff”, through the utilization of a vesting schedule.
 
Past Service   A company can increase contributions to a SERP by recognizing previous years of employer or industry related service.
 
Link to Performance A SERP can act as a valuable motivation tool when the funding is linked to the performance of each executive. 
 
Change of Control In designing a SERP, a company may specify that if they experience a change of control at some point in the future, the SERP would become 100% vested and fully funded immediately.
 
Cost-Recovery   A company may choose to use life insurance as a cost-recovery device, whereby the death benefit would be used to help fund future SERP obligations.